What is a patch panel used for?
A patch panel separates the hardwiring of your network from your networking equipment. Each run of cable that goes throughout the house or building is punched down on the back of the patch panel. Here is what the punch down area on the back of a patch panel looks like (pictured to the left):
Rather than RJ45 ports, this side is equipped with punch down terminations and color-coding for T568A and T568B wiring. There are also independent verification testing symbols for UL and 3P.
Each set of punch down terminations corresponds to a port on the front of the panel. Patch Cables connect the ports on the front of the patch panel (or panels) to your networking equipment (such as switches, hubs, and routers).
Some people get by without a patch panel by putting crimp-on connectors on the ends of their runs and plugging them directly into their networking equipment. This can be done when a budget is especially tight, but it's something to avoid if possible as it can result in a great deal of confusion and mess when you try to change anything in the future since it results in loose cables dangling out of the wall or ceiling.